How Gates's Microsoft will challenge Google and Apple

The return of Bill Gates to a more conspicuous role at Microsoft heralds a new
technology battle

Satya Nadella is Microsoft’s new chief executive, but make no mistake: Bill Gates remains the most important man in the company. The visionary who built it is coming home to Seattle. As Box.com CEO Aaron Levie observed on Twitter, tonight the town “will party like it’s Windows 98”.

A host of other options, including Ford’s Alan Mullally, ruled themselves out of the top job at Microsoft in part because they saw, with founder Bill Gates still around, it wasn’t really the top job.

There are, in a sense, two Microsofts. There’s the one that runs most of the world’s PCs thanks to Windows, that makes Office, critical thanks to Word, Powerpoint and Excel to most of the world’s businesses, and that makes the Xbox, the most exciting of the video games consoles.

Then there is the Microsoft that makes Windows Phone, which is a good product that is failing to thrive, and that makes Windows 8, the new operating system that the company is eager to reimagine because it’s ahead of its time. It’s also the Microsoft that makes costly Office, challenged constantly by free Google Docs, that runs Bing despite the obvious supremacy of Google, and which has captured none of the glamour of wearable technologies such as Google Glass.

So by stepping back from the broad, time-consuming roles of the chairman’s role, Gates will have the time to become the public visionary who once made Windows so dominant and who may yet do the same again. In appointing Nadella, a 22-year veteran who joined Microsoft when Gates had powered it to being the most important company in the world, he has ensured that the wheels will stay on track. Nadella’s business experience is crucial for a company that must remain enormously profitable if it is to ride the next transition.

Gates, meanwhile, can use what is his surprising rock star status to remind people that Microsoft has already changed the world: this is a man with the vision to try to eradicate polio, malaria and more through his Foundation. Before that, he beat a little company called Apple almost out of existence.

A cynic would say that Gates won the battle to keep control of Microsoft by getting Nadella appointed. It’s more accurate to say he’s got the revolution he wants, rather than that of an outsider.

What does that mean for consumers and customers? It is likely to mean more products that appeal unashamedly to the mass market. But that approach to hardware will pitch Microsoft not against Apple, but now against Google. It’s Bill Gates, the geek who opened Windows, versus Larry Page, the visionary wearing Glass.